Hot weather in the Northeast and upper Midwest finally cooled off, but gas prices remain hot. June is generally the month with the least demand for natural gas, but this month will be an exception. The seven-day period ending Tuesday was as hot as any seven-day period last summer. Prices now are running about a dollar higher than last year at this time. As I write this on Thursday, gas is trading at $7.60/MMBtu. Light demand usually allows storage levels to be rebuilt in June, but yesterday?s storage report came in below expectations, even after accounting for the warm weather. Storage levels remain well above average for the date, but fears of dwindling supplies remain. U.S. gas production fell in the first quarter by 75 billion cubic feet (?1.6 percent) compared to the same period last year. Canada, which supplies most of the U.S. imports, has been unable to increase production. Anxiety over continued supply weakness is not surprising. To make matters worse, oil prices continue to look for new highs, trading at $56/bbl Thursday and providing additional support for gas prices. The OPEC ministers officially raised their production quotas on Wednesday, but it was widely seen as a futile public relations ploy, and oil prices continued to climb. Current gas prices appear not to have dampened consumption or increased supply, so I expect prices to continue testing upper limits. There is little chance that North American gas supplies will increase, so prices will rise until demand drops significantly. Average prices for gas to be delivered over the next 12 months now are around $8/ MMBtu but can be expected to go even higher if the hot weather continues and oil goes over $60/bbl. Gas market jitters make a price of $10/MMBtu a definite possibility this year.